Microsoft grows impatient, threatens to drop its offer price for Yahoo!

Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Bloomberg News reports that Microsoft Corp. (NASDAQ: MSFT) has threatened to start a proxy war for Yahoo! (NASDAQ: YHOO) and to drop its offer price if it does not get a response from its board. CNNMoney reports that Microsoft CEO Steve Ballmer has set a three-week deadline for a response from Yahoo! Microsoft is making noises about cutting its $44.6 billion offer for Yahoo!, arguing that the U.S. economic slowdown has hurt Yahoo!’s business.

Microsoft offered Yahoo! $31 a share on January 31st — 62% above its price the day before — and Yahoo! rejected the offer on February 11. Meanwhile, Yahoo! and Microsoft have lost share in the U.S. search market while Google Inc. (NASDAQ: GOOG) has gained share. Specifically, Yahoo!’s share fell from 22.2% in January to 21.6% in February while Microsoft ’s dropped from 9.8% to 9.6%. Google’s rose to 59.2% from 58.5% in January.

Yahoo! appears to be deluding itself that a stand-alone strategy will boost its stock price. On March 18, Yahoo! argued that its second place position in Web search, its operations in Asia, and the potential cost savings of the deal show it’s worth more than Microsoft’s offer. Yahoo said then that sales will climb at least 19% in each of the next two years and that growth would be higher than analysts anticipated.

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This entry was posted on Saturday, April 5th, 2008 at 11:14 pm and is filed under Employment opportunities. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.